9/27/2001 @ 6:00PM

The 15 Richest People In America

The 15 richest people in America became $64 billion poorer as a group in the past year, thanks largely to the tech sector crash. For the eighth consecutive year, Bill Gates remains the wealthiest person in the U.S.–and on the planet–with a net worth of $54 billion.

Despite this year’s market turbulence, only two people cracked the top 15–Barbara Cox Anthony and Anne Cox Chambers. The sisters own media empire Cox Enterprises, whose public arm
Cox Communications
is said to be a potential bidder for AT&T Broadband.

William H. Gates III

Funny how a recession changes everything. A year ago, it seemed that Gates’ enemies at the Justice Department,
AOL
and
Oracle
had his Redmond, Wash., empire cornered. Now, the bruised tech sector looks to the once-feared Gates as a savior. The industry hopes Microsoft‘s new operating system, Windows XP, will result in more PC and microchip sales, breathing life into those markets.

In Microsoft’s
boldest move since Windows 95, the company is introducing a video game console dubbed Xbox, which will go head to head against Sony’s PlayStation 2 and Nintendo’s GameCube. The potential payoff is huge, but entering the hardware business is a gamble. Microsoft plans to spend half a billion dollars to promote the machine this holiday season, but given the competition, success is far from guaranteed.

Things are more certain on the legal front. The Justice Department is backing off, saying in September that it’s not seeking to split up the company and calling for a speedy settlement in the antitrust case. Gates is also continuing to give his money away in earnest. His $23.5 billion Bill & Melinda Gates Foundation has pumped millions into funding disease prevention and education in the past year. He can afford it. Despite losing an estimated $9 billion in the tech meltdown, Gates is still 38% wealthier than America’s second richest man.

The Richest Of The RIch

Warren Buffett

For most of his career, investors have been awed by Buffett’s ability to sniff out a great buy. Now, he is being equally venerated for avoiding stinkers, like the tech stocks he was too wise to acquire in 1998 and 1999.

Though Berkshire Hathaway‘s
earnings rose 21% in the second quarter, Buffett has been grouchier than ever–even about his own results. Buffett complained about the “very unsatisfactory” showing of General Re, the reinsurance division Berkshire Hathaway bought for $20 billion three years ago. Claims from the destruction of the World Trade Center will cost Berkshire $2.2 billion in pretax losses.

But perhaps most encumbering, his firm is running up against the laws of large numbers. “The probability of us achieving 15% growth in earnings over an extended period of years is so close to zero it’s not worth calculating,” he said this spring. “Nor do we think any large company in the United States is likely to [post such growth].”

The Richest Of The RIch

Paul Allen

The
Microsoft
co-founder saw almost $8 billion evaporate like so many dot-com business plans over the past year. Allen’s star-crossed high-tech ventures included financial Web site
TheStreet.com
, voice and data services provider
RCN
and entertainment site Pop.com.

But losing $7.8 billion last year didn’t put a damper on the 48-year-old’s inventive splurges. Allen’s most recent extravagance: inviting 200 of his closest friends (including Tom Hanks, Dan Aykroyd and Paul McCartney) on an all-expenses paid cruise from Finland’s Helsinki to St. Petersburg, Russia. One daytime excursion involved visiting a Russian shooting range to fire AK-47 assault rifles.

The Richest Of The RIch

Larry Ellison

Ellison’s
Oracle
seemed poised to eclipse
Microsoft
as the pre-eminent high-tech empire last year. Then the tech sector crashed, and the race between Oracle and Microsoft–and the concurrent one for the title of world’s richest man between Ellison and Gates–looks all but over.

Oracle has seen its stock fall by 58% in 2001, and Ellison has dropped to fourth place on America’s richest list, his personal wealth down 63% from last year. One important reason: Oracle’s latest software suite, 11i, was late, had bugs and didn’t meet its aggressive sales goals. The 57-year-old’s hubris, an asset in yesteryear’s testosterone-fueled high-tech boom, has become a point of concern, especially as execs (like former Oracle President
Ray
Lane
Ray Lane
and Executive Vice President
Gary
Bloom
Gary Bloom
) flee and succession plans remain murky.

The Richest Of The RIch

The Waltons

The famously low-profile Walton clan, which owns about 38% of
Wal-Mart Stores
stock, got some unwanted attention in the past year.
John T.
Walton
John T. Walton
poured more than $4 million into unsuccessful campaigns for school vouchers. Then The Sunday Times of London erroneously reported in April that
S. Robson
Walton
S. Robson Walton
, another of the great Sam’s sons, had displaced
Bill
Gates
Bill Gates
as the world’s richest person. The number crunching was better at the Bentonville, Ark., headquarters of the discount retailer. Net income for fiscal 2001 jumped more than 17%.

The Richest Of The RIch

Steve Ballmer

After years of not seeming to care that John Q. Public considered it an evil empire,
Microsoft
finally went on a PR blitz last year. The plan involved having Chief Executive Officer Ballmer make soft, populist pitches for the company (comparing a court-imposed breakup of Microsoft to “breaking up John Lennon and Paul McCartney because they had too many number one hits”) while
Bill
Gates
Bill Gates
took a backseat.

Ballmer has become the most visible promoter of the new Windows XP operating system. Earlier this year, it was Ballmer–sans Bill–who met with Vice President Dick Cheney. The 45-year-old, with his chubby, suburban sitcom-dad appearance, has become the kinder, gentler face of the company.

But two video snippets that circled the Web in August undermine the image makeover. In one clip, a stunned audience at a Microsoft conference looks on as Ballmer demonically shouts the word “developers” 14 times with mounting levels of ecstasy. Even his elbows sweat. In the other, Ballmer emits primordial screams while bounding about a stage with the brio of a heavy metal rocker. It’s not clear whether investors should be distressed or relieved that the boys in Redmond still have that psychotic drive.

The Richest Of The RIch

Barbara Cox Anthony and Anne Cox Chambers

All eyes in the high-tech sector turned to this newspaper dynasty after reports said it was in the hunt for AT&T‘s coveted cable holdings. The sisters inherited
Cox Communications
–which controls 18 daily newspapers (including The Atlanta Constitution), cable operations with 6 million subscribers and radio and television stations–from their father,
James M.
Cox
James M. Cox
. Barbara’s son,
James
Kennedy
James Kennedy
, now runs operations.

The business has always been a family affair: In its 103-year history, it has had only four chairmen: Kennedy and his grandfather, uncle and stepfather. The Cox empire, which was born with the acquisition of Ohio’s Dayton Daily News in 1898, has seen more recent investments in dotcoms like
Excite@Home
,
Ivillage
and MP3.com shrivel. Still, the foray into the new economy hasn’t been all bad, as Cox’s cable telephony strategy has given the company the inside track in the race for AT&T’s
broadband assets.

While Barbara leads a low-profile life in Honolulu, Atlanta-based Anne is a force in Democratic Party politics. Her father was the party’s nominee for president in 1920 (FDR was his would-be VP), and President Carter appointed her ambassador to Belgium after she helped get him elected.

The Richest Of The RIch

John Kluge

It has been a year of giving and taking for John Kluge. In May, the 86-year-old president of broadcast and telecom giant Metromedia gave the University of Virginia his 7,378-acre Albemarle County, Va., estate, a $45 million gift.

But investors have taken Kluge–and long-time second-in-command Stuart Subotnick–to task over what they allege is an artificially depressed stock price for the company’s
Metromedia International Group
. What’s more, lenders to its
Metromedia Fiber Network
subsidiary are seeking reassurance as it scrambles to stave off a bankruptcy filing brought on by over-expansion.

The Richest Of The RIch

Sumner Redstone

The owner of MTV and Nickelodeon insists that he gets younger every day. So don’t ask the 78-year-old about retirement or plans to hand over the reins of movie, TV and publishing giant
Viacom
to respected Chief Operating Officer
Mel
Karmazin
Mel Karmazin
.

Viacom, which relies on advertising for about half of its revenue, has seen shares thrashed by the economic slowdown, shaving Redstone’s wealth by almost $4 billion this year. A sagging stock price has also made it hard to pursue acquisition targets like NBC and CNN. Still, the company continues churning out popular hits, from the Survivor TV show, to popcorn flick Lara Croft: Tomb Raider, to David McCullough’s weighty biography of John Adams.

But with users apparently satisfied with the capabilities of their current PCs, that might be a bit like waiting for Godot. Dell is banking on Microsoft‘s
new XP operating system to fire up demand. The company also hopes that PC buyers who bought their machines before the feared 2000 bug will want an upgrade.